|
Liquidity, Solid Business Practices Keys to Survival, Experts Say
Liquidity and good business practices are the only true solutions to surviving the current downturn, according to a panel of industry and financial experts participating in the Aug. 21 Webinar, “Coping With Financial Distress,” by Constellation HomeBuilder Systems and NAHB’s Business Management & Information Technology Committee.
 “Cash is king” and will create a buffer to help builders through the tough market, said Ron Robichaud, of Robichaud Financial Services in Laconia, N.H. “We’ve seen builders who have run through all their cash reserves and exhausted all their assets. Creating liquidity is the key to survival.”
Builders can spend their cash to boost their businesses if they have it, added bankruptcy attorney Harley Riedel, of Stichter, Riedel, Blain and Prosser, P.A. of Tampa, Fla., “but only if it solves your problem.”
“I know some builders who have been pulling money out of their savings accounts to stay alive,” said builder Randy Noel. “At some point you look at it and say, ‘Where do I stop bleeding and where do I get off this train?’”
Bring in Professionals to Take a Good, Hard Look at Your Business
Commercial and mortgage banking expert Tom Flowers, who has worked at Bank of America and U.S. Bank, said builders should conduct a “realistic, hard-nosed assessment” of where they are in their marketplace. This could require bringing in outside legal, accounting and other business professionals, he said.
“You cannot know everything you need to know about how to run your business yourself,” said Flowers.
Outside professionals will see things that the typical builder might not see because he didn’t have to deal with that adversity when times were good, Flowers said. “This may be a good time to find some additional help.”
Follow their advice, Flowers added, while noting that builders need to be aware of any unintended consequences that could occur if they make capricious moves with their capital. Outside professionals should be able to warn them, he said.
Flowers said now, in these difficult times, builders must ask themselves some very basic — and difficult — questions: Can I survive? Do I want to survive? What’s the best course for me in the short run? For the rest of my life?
“If you know you’re going to have difficulties, be aware of them,” Flowers said. “Recognize what those issues are going to be and make plans and take steps early to deal with them.”
Protect Business and Personal Assets
Riedel offered several ways builders could protect their business and personal assets if they were facing financial distress and potential bankruptcy:
- Keep Business Banking and Business Negotiating Separate: Riedel recommended that builders not bank with the same institutions where they are about to negotiate contracts and loans. If those banks are owed money, he said, they could issue stop payments, bounce checks and take the balance on the builder’s accounts. The banks could also take the builder’s personal account, Riedel said.
- An Automatic Stay Could Preserve Cash: In a bankruptcy proceeding, an automatic stay gives the debtor protection from his creditors, subject to the oversight of the bankruptcy judge, and brings all of the debtor's assets and creditors into bankruptcy court, where the rights of all concerned can be balanced. This procedure could help builders preserve cash and increase liquidity, Riedel said.
- Don’t Jeopardize Personal Assets: Riedel recommended that builders determine what assets are exempt from being taken in bankruptcy proceeding and only “dip into them” if they are 100% protected. Under federal law, retirement benefits are exempt and in many states, homesteads, jointly-owned property, annuities and insurance proceeds are exempt. But builders need to understand the bankruptcy laws in their states before they use these types of assets to bolster their business, he said.
Keep Communications With Banks Open
 Restructuring expert Troy Taylor, of Algon Group in Atlanta, urged builders to continue communicating with their banks and lenders, even though these discussions could be unpleasant.
If builders are at the point where they think they are even remotely approaching a serious problem, “sit down with the bank and communicate,” he said. If need be, builders should bring along their legal and business teams to help in the discussions, he added.
“This is an unpleasant time for everybody,” Taylor said. “Builders are going to lose a lot of money and banks are going to lose a ton of money.”
“Sitting down with your bankers and telling them you‘re not going to be able to pay them is not going to be a great conversation, which is one of the reasons why having a third party there will help a little bit to take some of the bullets,” Flowers said.
“The truth is, this is not pleasant stuff, and there is no way it’s going to be done without salt in the wounds,” he added.
Webinar Discussion Available Free
The 90-minute Webinar is available free to NAHB members. To view the Webinar, click on “Coping with Financial Distress.”
|
 |
Custom Builder Symposium Can Help Navigate Downturn
The 2008 Custom Builder Symposium on Oct. 24-26 in Austin, Texas is offering a wide range of educational courses that can help custom home builders navigate through the industry downturn.
Courses at NAHB's premier educational and networking event for custom builders feature the latest in home technology, business management, design and green building.
The symposium will be at the Hilton Austin.
Courses include:
- “The Custom Builder and Home Technology”
- “Recession-Proofing Your Building Business”
- “Design Charrette — From Plan Book Parts to Great Design”
- “A Residential Case Study”
- And more
Attendees seeking to earn their Certified Green Professional (CGP) designation can sign up for one or both required courses — “Green Building for Building Professionals” and “Business Management for Building Professionals.”
More than Just Education
In addition, the symposium features a home tour, golf tour, Custom Home Builder of the Year Award and several networking opportunities. The home tour will offer a view on the latest green initiatives, newest building techniques and cutting-edge technology.
The golf tournament will provide views of beautiful vistas and elevation changes and features numerous large fairway and greenside bunkers. The course, at Crenshaw Cliffside, was designed by Ben Crenshaw and design partner Bill Coore.
The NAHB Custom Home Builder of the Year Award recognizes a custom builder for his or her outstanding leadership and business practices, as well as craftsmanship in building one-of-a-kind custom homes.
To Register for the Symposium
Online registration is now open. For more information and to register, go to www.nahb.org/custom.
For more information, e-mail Marcia Childs at NAHB, or call her at 800-368-5242 x8388.
[return to top]
|
|
Resources: NAHB PR Toolkit Helps Promote Tax Credit, Bust Media Myths
The NAHB PR Toolkit, a comprehensive guide and resource that helps home builders associations and NAHB members plan, implement and measure public relations programs, has been updated and is now available online on the NAHB Web site at www.nahb.org/prtoolkit.
The toolkit can be used as a resource as members and HBAs plan strategies to promote the $7,500 first-time home buyer tax credit for consumers and get the facts about their particular housing markets out to local media and buyers.
Members and HBAs can access and read or print toolkit chapters that cover topics such as working effectively with the media, how to leverage NAHB resources, what to consider when developing key messages and other tips on how to generate favorable publicity.
Promotional materials are also available from NAHB to help promote the new $7,500 tax credit, which has garnered plenty of interest since it was passed. In the first two weeks after NAHB’s tax credit information Web site http://www.federalhousingtaxcredit.com/ went live, the site attracted more than 100,000 unique visitors. Access the materials here.
Members and HBA staff must be logged in to the NAHB Web site in order to view the PR Toolkit and Myth Buster materials.
For more information, e-mail NAHB Public Affairs, or call 800-368-5242 x8447
[return to top]
|
|
Being A Member Just Got Better
New to the Member Advantage Program: Discounts at Omaha Steaks
Just in time for autumn cookouts and tailgate parties, NAHB members can save 10% on all Omaha Steaks food and specialty items when they shop online at the Omaha Steaks special NAHB Member Advantage Web page.
Omaha Steaks, a leader in the incentive industry for more than 40 years, has a first-class reputation and a variety of gourmet entrees and items available to members, including beef, pork, poultry, pasta, salmon, tuna, seafood, appetizers, side dishes and desserts.
Members ordering Omaha Steaks discounts ― which also include specialty selections, blockbuster combos, family value combos, soups, snacks, breads, coffee and monthly specials — can use them as gifts for their customers, clients, friends, family and staff members.
The 10% discount can be combined with any special found on the Omaha Steaks special NAHB Member Advantage Web page.
To order online and receive the Omaha Steaks 10% discount, click here.
Other Member Advantage Discounts
For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.
Dell to Give Double Discounts in September
 Dell is offering double discounts to NAHB members now through Sept. 30 on an array of products designed to meet the technology needs of your company.
That means Dell’s normal discounts of 3% to 5% to NAHB members will double to 6% to 10% on essential small business technology, including business-class desktops and cutting-edge notebooks.
Dell backs its products with a team of dedicated representatives who understand the industry’s business needs, and can help build a complete solution that’s right for each member.
Just go to www.dell.com/nahb to make your selections.
To maximize this Member Advantage Discount
After you have made your selections and are ready to purchase, call your dedicated Dell sales line at 888-577-3355 (Mention Link ID#115762620), Monday through Friday, 7:00 a.m. to 8:00 p.m. (CST) and Saturday, 8:00 a.m. to 5:00 p.m. (CST).
Your sales representative will apply your NAHB member discount to your order.
[return to top]
|
|
Hone Your Warranty Service to Boost Referrals
By Tracey Gundersen, CEO, Warranty Management Technologies
Your warranty service may be the last impression you make on your customers. It also is often the impresssion they remember most.
To ensure that your last impression is a good one ― one that can generate referrals ― follow these 12 simple steps to keep your customers happy and saying only good things about you.
- Under-promise and over-deliver — Be remembered for keeping, not breaking promises. This one step can secure a positive long-term relationship with a customer.
- Brand your warranty service — Why not give your warranty service an identity? Find something memorable and have your warranty service people repeat it every time they enter your customers’ homes. Maybe, it’s something as simple as having your service people wearing a uniform.
Maybe you can have them take off their shoes (or boots) before entering a new home. That’s something new home buyers will remember — and talk about appreciatively.
You can even develop a catch phrase to emphasize your memorable action, something like, “XYZ Warranty Service…we take off our shoes because it’s your home.”
- Establish a warranty service Web log — A blog or other online communications tool is one of the simplest ways to communicate with customers. You can use it to introduce your warranty staff and trade contractors.
Take advantage of the resource by posting photos and videos, too. The blog can be a great way to tell success stories and demonstrate your commitment to service.
- Tell your success stories — How well do your service personnel respond? How often do your people go above and beyond to help out a buyer?
When you have successes like these, be sure to tell these success stories from the customer’s perspective. Your credibility will skyrocket ― especially when you include your buyers’ comments.
Post these stories and comments on your blog and Web site and feature them in your advertisements and direct mail.
- Use video — Show warranty work and demonstrate how your service department does repairs. You don’t have to hire a professional video crew. A simple hand-held video camera should do fine.
Also, post these video on the company Web site site, service blog and YouTube. This provides value for any future prospective customers or current home owners who are out-of-warranty.
- Ask for your customers’ opinions — Asking can be as simple as a sincere, “How are we doing?” Asking them about your warranty service lets them know that you and your company do not consider this follow-up work as an afterthought or necessary evil. It lets them know they are valued customers.
Ask some open-ended question (i.e., who, what, where, when, why, how) so you can gather valuable information that can help you improve your service. Even better, you may be able to gather happy responses that can easily be turned into testimonials that can lead to referrals.
- Provide quarterly maintenance tips from the service department — Remind customers about seasonal maintenance responsibilities like changing filters. This helps reduce service requests and potential trouble down the road.
Send them tips via postcards, letters, e-mail or on the Web.
Better yet, have your service personnel change their furnace filters while giving them other seasonal tips. This will make a lasting impression that can lead to referrals.
- Establish a service FAQ page — Post a solid and thorough list of frequently asked questions (FAQ) on your Web site or blog, or have them available in print form to mail or distribute with your warranty agreement. This is an effective way to be responsive to customers’ needs.
A service FAQ is extremely useful because it provides answers to commonly asked questions without having your customers call you. Your customers will get the answers they need quickly and your service calls will decline.
Be sure to keep your FAQ updated with new and relevant questions.
- Build relationships — Use all your communications tools to show the company’s human side; it will build a stronger relationship with your customers.
Service personnel can use the blog to talk about their hobbies, interests or family. Encourage them and your customers to share photos, recipes, restaurant tips or vacation ideas.
Also, subscribe to the community newspapers in the areas where you build so you can keep track of your customers, or their kids, making the news. When they do, clip the articles and send them to them with a congratulatory note.
- What’s your service philosophy? — Your service philosophy is an effective marketing tool. Post it everywhere — on your Web site and blog, in closing materials, on posters, office walls and placards by every company phone. Put it on a refrigerator magnet that you give to your home owners.
But remember, your service philosophy is not just an advertising tool, it’s a commitment to your customers.
- You’re not just providing warranty service, you’re serving a family — Customer service goes beyond doing the tasks. It’s remembering who your customers are.
Send them a handwritten postcard on the anniversary they moved in, or on their birthday, the Fourth of July or their children’s birthdays.
Do they have a pet? If so, have your service personnel arrive with an animal treat.
In order to garner positive word of mouth about warranty service, be memorable and authentic. Send these items courtesy of the service program.
- Encourage your trades to participate — Make your trades a part of your service team. Identify them to customers. Post their pictures and success stories on the Web.
Remember, your whole company delivers warranty service. One surly person can undo a year's worth of hard work.
Everyone needs to be committed and accountable to the customer.
Tracey Gundersen is the founder and CEO of Warranty Management Technologies, LLC, of Burnsville, Minn. The firm provides warranty process management software, consulting services and fully outsourced customer service to new home builders. For more information, e-mail Gundersen, call her at 952-707-0725 or visit www.homsoft.com.
[return to top]
|
|
Fall Board of Directors This Month
Materials on NAHB.ORG
For the committees that are under the purview of the of the NAHB Business Management and Information Technology Department, materials will only be available online at www.nahb.org. Extra power strips will be available in staff rooms. Staff has set up direct links to meeting materials at the following addresses:
[return to top]
|
|
|
